Dr Reddy's Laboratories has denied that it is looking to sell off a stake in the firm after rumours to that effect led to a major rise in the Indian drugmaker’s stock.

The company has issued a statement saying that its founders “have no intention of diluting their stake”, which is thought to be between 23%-26%, and such a move “is purely a market speculation". Dr Reddy’s response comes after a report in the Times of India claimed that such a deal could take place.

The newspaper claimed that potential investors include GlaxoSmithKline, Pfizer, Merck & Co and Sanofi-Aventis. The rumours have helped push Dr Reddy’s stock to a three-year high.

The Times of India quoted PricewaterhouseCoopers India associate director Sujay Shetty, as saying that Dr Reddy's “is a prized asset and a well-reputed company whose brand is known across the world. So whoever has India and generics close to their heart and as part of their growth strategy cannot afford to give the company a miss”.

Rumours that GSK would like a stake in the Indian firm have been powered by the fact that the drugs major signed a deal in June to get access to Dr Reddy’s “rich and diverse” portfolio and future pipeline. It wouldalso manufacture products licensed and supplied by GSK in countries such as Africa, the Middle East, Asia Pacific and Latin America, but not India